The ‘Developed Gujarat Industrial Policy-2026: Assistance Scheme for MSMEs’ was announced Friday. Effective from 1 June 2026, it will remain in force until 31 May 2031. 

Announced under the guidance of Deputy Chief Minister Harsh Sanghavi, who holds the Industries and Mines portfolio, the scheme aims not only to provide financial relief to MSMEs but also to strengthen their production capacity, technological capabilities, employment generation, and competitiveness in global markets.

Capital Investment Subsidy

The scheme’s key feature is a combined incentive framework covering capital investment, interest, and electricity costs. Depending on the ‘taluka’ or subdivision, the maximum combined incentive for eligible MSMEs is capped at 45% of Eligible Fixed Capital Investment (EFCI) in Category A and 35% in Category B. 

Micro enterprises in Category A may receive capital assistance of up to 35% of EFCI disbursed in one year, while small and medium enterprises may receive up to 35% of EFCI disbursed over five years. The corresponding rates in Category B are 25%.

Additionally, eligible term loans will receive an interest subsidy of 7% for five years. Electricity tariff assistance of up to ₹2 per unit in Category A and ₹1 per unit in Category B is also available. For selected thrust sectors, the maximum combined incentive is higher, at 50% of EFCI in Category A and 45% in Category B. 

All assistance is subject to the scheme’s eligibility criteria, duration, and prescribed limits.

Extra Support for Women

Women entrepreneurs, registered manufacturing-sector startups, and first-generation entrepreneurs will receive an additional 1% interest subsidy on eligible term loans, within the prescribed limits.

Special provisions have also been made for micro enterprises during their initial years. The annual limit for the first year will be up to 37% in Category A and 27% in Category B. In subsequent years, an annual limit of 2% will apply to both categories. 

Micro enterprises in select thrust sectors will be eligible for more favourable provisions.

EPF Support

MSMEs creating new jobs may receive reimbursement of up to 100% of the employer’s contribution to Employee Provident Fund (EPF) for five years. The assistance applies to new employees, and eligible enterprises generating additional employment through expansion or diversification can also benefit.

The reimbursement will be calculated on the basis of 12% of the employee’s basic salary, Dearness Allowance (DA) and retaining allowance, or the prescribed monthly amount, whichever is lower.

ERP And Quality Certification Aid

The scheme encourages MSMEs to improve production efficiency and adopt quality standards required to access national and international markets. 

Eligible enterprises can receive assistance covering up to 65% of the capital cost of installing an Enterprise Resource Planning (ERP) system, subject to a maximum of ₹1 lakh. For national and international quality certification, assistance of up to 50% of certification fees and the cost of necessary testing equipment and machinery is available, capped at ₹10 lakh.

For Zero Defect, Zero Effect (ZED) certification, assistance of up to 50% of the charges remaining after Central government assistance will be provided, subject to a maximum of ₹50,000. These provisions aim to promote quality manufacturing, improved production processes and environmentally sustainable industrial operations.

Industry 4.0 And AI Incentives

The scheme also promotes digital technologies and AI-driven industrial transformation. Assistance of up to 65% of eligible capital expenditure on Information and Communication Technology (ICT) facilities is available, capped at ₹5 lakh.

For technology acquisition from recognised institutions, ordinary MSMEs can receive assistance of up to 65%, subject to a maximum of ₹50 lakh. For selected thrust sectors, the maximum assistance has been increased to ₹1 crore.

To extend AI adoption to smaller businesses, micro enterprises, and artisans in selected thrust sectors can receive assistance covering up to 80% of AI subscription fees, capped at ₹1 lakh annually for three years. These provisions could help smaller enterprises adopt new technologies for production planning, quality control, data-driven decision-making, and operational efficiency.

Patent And IPR Incentives

To encourage innovation and research, the scheme provides assistance of up to 75% of patent registration costs, capped at ₹25 lakh per applicant or enterprise. 

For select thrust sectors, assistance covering up to 75% of eligible expenditure on Intellectual Property Rights (IPR), including patents, designs, copyrights, trademarks and Geographical Indications (GI), is available, subject to a maximum of ₹1 crore. The assistance is intended to help enterprises protect their technologies, product designs and brands.

Energy And Water Conservation Aid

To improve energy and water efficiency, enterprises can receive assistance covering up to 75% of audit costs, capped at ₹50,000. A one-time subsidy covering up to 25% of the cost of equipment recommended by the auditor is also available, subject to a maximum of ₹20 lakh. 

To qualify, enterprises must achieve at least 10% savings in energy or water consumption compared with the average monthly consumption during the preceding 12 months.

SME Listings And Loan Support

To help MSMEs access capital markets beyond conventional bank financing, the scheme provides a one-time reimbursement of up to 25% of the expenditure incurred in raising equity through an SME Exchange under SEBI guidelines, subject to a maximum of ₹5 lakh.

Under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), eligible enterprises can also receive reimbursement of up to 100% of the annual service fee paid for collateral-free term loans for five years. This provision aims to reduce financing costs for eligible smaller businesses.

Power And Industrial Shed Subsidies

Eligible MSMEs located outside GIDC or approved industrial parks can receive assistance covering up to 35% of distribution licensee charges paid for a new electricity connection, additional load, or changes to a connection or service line, subject to a maximum of ₹5 lakh.

MSMEs renting or leasing industrial sheds for manufacturing can receive assistance covering up to 65% of the rent paid. For enterprises wholly owned by women, the rate increases to 75%. In both cases, the maximum assistance is ₹3 lakh per year for five years.

Incentives For Thrust Sectors

Manufacturing of sports equipment, toys, footwear, robots, and drones has been identified as part of the selected thrust sectors. These industries will receive additional incentives beyond the general assistance available under the scheme.

The provisions include 100% reimbursement of stamp duty and registration charges paid on land purchase or lease. For international certification, 100% reimbursement of eligible fees is available, subject to a maximum of ₹5 crore.

The scheme also provides training assistance of up to ₹8,000 per employee per month during the first 12 months. Enterprises establishing a Creative Design Studio can receive assistance covering up to 50% of eligible costs, capped at ₹5 crore. Special incentives for technology acquisition and IPR are also available to these sectors.

85% Local Employment Requirement

Enterprises receiving assistance under the scheme must ensure that at least 85% of their total workforce comprises residents of Gujarat. At least 60% of employees at the managerial and supervisory levels must also be Gujarat residents. 

The requirement aims to link industrial investment with employment opportunities for local residents. Enterprises must comply with these conditions to qualify for and continue receiving the benefits.

Investments Eligible From January 2026

The scheme allows certain investments made before its formal implementation to be considered, subject to prescribed conditions. Eligible assets purchased and paid for on or after 1 January 2026 may be included in the calculation.

For investments in plant and machinery of up to ₹50 crore, the eligible investment period will be 12 months from the Date of Commercial Production (DoCP). For investments exceeding ₹50 crore but not exceeding ₹125 crore, the eligible period will be 18 months from DoCP.